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the economy's surprising downturn in the 4th quarter, and why traders are not overly concerned. in today's cover story, name changer at "blackberry." will the corporate makeover help to turn around the company? bulls and bears are at odds over the dow's chances of heading above the critical 14,000 level. plus, the co-ceo of whole foods dishes about hot corporate topics. and, can zombies bring new life to the box office? first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. i'm angela miles. it's thursday, january 31st, the final trading day of the month. in today's first look: stocks pull back. the dow toned
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down its march to 14,000. traders and investors took money off the table as gdp came in weaker than expected for the 4th quarter. instead they put money into gold and oil. facebook's wild night: shares initially dropped 10% on earnings that topped wall street's expectations, then turned around and rallied back with a gain. as lawmakers consider gun laws, the nra reports membership is up a half million people, and the campaign to prevent gun violence reports recently raising $5 million. and time magazine plans to get lean. the company is cutting 500 jobs worldwide, to become more nimble. ben lichtenstein of joins us for a closer look at the market today. ben, how rattled are traders behind the scenes over the latest gdp number? > > for the most part not really. initial reaction to the number was extremely limited this morning. again, slightly lower, not much of a concern. one thing traders were talking about is the second lower
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number: are we in a recession? > what about the fed fallout? the fed is standing pat but continuing on with stimulus. > > now there was a little bit more fallout from the fed activity. we saw high-energy sell-side activity late in the afternoon session. it took a little while to come off, but again, for the most part, it was mostly led by the russell. the nasdaq was kind of lagging. the dow was joining in, and the s&p's definitely came to the front of the party as well and decided to join in a little bit late as well. this is one of the first days we have seen in weeks where we've actually closed on lows. i didn't think that it was even allowed anymore, but it looks like they did allow one in today. > what is behind the move in the euro? > > we are seeing a weak dollar, but also we are seeing some strength in the european markets. again, there was some news about spain, some concern about their gdp; but for the most part, i think that the overall consensus right now is just that things are looking up a little bit across the board for the most part. so, i think that optimism is spreading a little bit. we haven't really seen the dollar come off yet,
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but i want to point out while the euro is inching its way up to that $1.36 level, this is really just a test of upper levels that we saw last year. we need to see some follow- through, some conviction, before i am really buying into it. again, i think right now it is just a test of the upper extreme. > it's good to have your thoughts ben. thank you. > > thank you. the maker of the blackberry, the smartphone that once dominated the market but has since been replaced, has hopes for a comeback with the launch of a new line of phones. our cover story takes a look at immediate reaction to the phone and the dream. with all the i.t. and marketing flair we've come to expect at smartphone rollouts, canadian firm blackberry introduced its two newest stars: the z-10 touchscreen smartphone and q-10 with blackberry's familiar keyboard. the company also junked its old name, research in motion, that most people hardly ever used. "from this point forward, rim becomes blackberry." blackberry used to dominate. the little buttons made it easy to text. but competitors with touchscreens took over. "i used to have a blackberry,
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but an iphone is easier." "do you think this will bring back the faithful? some, but it won't be that huge." analysts liked blackberry's new phones' speed in texting, predictive abilities and business apps, but u.s. consumers won't be able to buy the phones until march - disappointing news to some. "we were most interested in pricing, but that's a bit of a disappointment. it'll compete in price with the iphone and samsung galaxy, and we think it'll have less of a chance of converting those customers over." monday, the current ticker symbol will change from rim to bbry. the stock, which surged 140% in anticipation of the launch, wound up losing 12%, down $1.88 per share. many have called this a hail mary pass for blackberrym, which fits with an expensive ad
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buy during the super bowl. the company also introduced singer- songwriter alicia keys as its global creative director. a bankruptcy court will consider a proposal today that could return missing money to mf global investors. farmers and other investors lost mllions of dollars when the brokerage firm fell apart in 2011. regulators uncovered $1.6 billion trapped in wire transfers. the new york times is calling today's court proceedings a turning point in the case. boeing's ceo is confident investigations will reveal the source of the dreamliner's problems, but won't say how long that will take. joe schwieterman, an airline analyst, predicts pressure from airlines may get the planes back in service within a few weeks or sooner. "i think news coming out that it's the battery could allow the faa to release the
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grounding with provision for perhaps daily inspections. there's going to be big pressure on the faa not to drag into a half-year delay." boeing reported better-than- expected earnings, and the dreamliner's disturbance is not expected to affect the company's full-year outlook. new trouble for toyota. the car company is recalling more than 1 mllion cars for bad air bags and front window wipers that can become stuck in heavy snow. the faulty air bags that can improperly inflate are mostly in 2003 & 04 corollas, and the wipers on lexus i-s models from 2006 - 2013. details could emerge today about massive job cuts at daimler truck factories. workers are bracing for potential layoffs that could happen at plants in north carolina, south carolina, oregon, mexico and germany. a total of 2100 jobs
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could be dropped - 1300 from factories in north america, plus 800 in germany. daimler is responding to less-than-expected demand for its trucks and school buses. chrysler is going from bankrupt to breakout. the automaker made $1.7 billion in 2012, and profits could touch $2.2 billion this year, a huge improvement from 3 years ago when chrysler sputtered its way to a taxpayer bailout. the ceo is promising bonuses to employees because of the comeback. chrysler has limited exposure to europe, but has yet to gain traction in china. shares of chesapeake energy shot up following news the company's ceo will soon bid farewell. shares rose 6% in yesterday's trading session, closing out the day at $20. chesapeake ceo aubrey mclendon announced earlier this week he will leave the company in april. mclendon
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has been under review for months by federal regulators after reports that mclendon used company funds for personal gain. reuters reports that mclendon will leave the company with full compensation, plus stock awards, all totaling $47 million. china is on a fast burn with coal and shows no signs of letting up. according to a new report, coal consumption in china increased 9% compared to last year. it's the 12th straight rise in a row. china now accounts for 47% of coal use, nearly as much as the rest of the world combined. up until 2011, the u.s. was the world's largest coal burning country. student loan delinquency rates are on the rise, and it could eventually hurt the economy. a report shows more than half of students are delaying payments on their loans as they struggle to find work. last year, the average student owed $27,253, up a whopping 58% from 2005, when student loan debt averaged just above $17,000.
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here is what everybody is talking about: the dow is within striking distance of 14,000. it's been an incredible ride for investors who had the courage to buy stocks back in 2007 when the market was crashing with people selling stocks with both hands. what's the best move now? joining us this morning, larry shover of sfg alternatives, who is bearish on this market, and matt shapiro, president of mws capital, who is a raging bull. matt, you believe investors are not bullish enough. why? > > they are not, because we have a housing recovery and some of the best economic fundamentals we have had in quite a while notwithstanding the fiscal cliff slowdown in gdp that we found out about yesterday. however, if the
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market returns to its historical median valuation, we can go 10-15% higher from here, and i think the market is going to extend higher to a new level, and investors who don't invest long-term are going to regret not participating in this move. > larry, will they be sorry? what are your concerns about the market? > > i don't think at all. it is true that markets have a way of moving long before the math and the headlines say so, but right now the growth metrics have to revive themselves. something that we are seeing in china, but we are not seeing in europe and the u.s. we have made a nice run. it is time for a breather. i see a 5% correction in the cards very soon. > matt, at some point, won't money managers and traders be tempted to take profits? > > i think people who have gotten used to trading over the last four years, you can always delay stock purchases. but some time that is just going to end, and all the large money managers are spreading the word and the theme that equities are the place to be, and retail and institutional investors are catching that theme, and that is going to be a sentiment shift that is going to be hard to bypass. even if we have some corrections, that is going to be easily gathered up, and the
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market is going to go higher. > larry, last word: are you a seller? > > i am definitely a seller right now, and we are well overdue for a pause, especially now that the press is becoming very celebratory as opposed to cautious. > thanks everyone. good to have you guys on the show. thank you. still to come, underdogs at the box office: the surprise hits audiences are rooting for. but first, the "whole" story: talking food, ethics, and more with a chief executive of whole foods. that's next with bill moller.
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7,000 high-school students drop out every school day. let's catch them before it's too late. to start helping students in your community, visit while capitalistic excess & greed have sullied so many companies, there are a lot of examples of ethical capitalism where the principles enshrined in framed mission statements, instead of just collecting dust on the wall, are actually adhered to. these are companies that do good, make profits & serve employees, customers and their shareholders. "conscious capitalism" you might call it, which is also the name of a new book about liberating the heroic spirit of business. it was co-written by the co-founder and co-ceo of whole foods, john
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mackey. now i was thinking, if the principles in this book were being taught in business schools & they were universally accepted in board rooms, you wouldn't have to write a book about it. > > hopefully i would write another book that would take the story a little bit further along. > but it does speak to the fact that it is still an anomaly to see a company that is run from top to bottom on good principles. > > i don't know if it's an anomaly. i think most businesses are ethical. business is the greatest value creator in the world. it creates value for its customers, for its employees, for its suppliers, for its investors, and for the larger communities. most of that value creation is done unconsciously. we think it can be done better if people become aware, if businesses become aware of their higher purpose, and how to consciously create
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value for all those stakeholders. > and it doesn't mean a compromise of profits either. is that sometimes the misunderstanding? > > i think that is the big misunderstanding, that there is this big trade-off between stakeholders. if you're creating value for customers, then maybe that is coming at the expense of the investors. or if you are philanthropic, that that necessarily is a loss to the organization. what we have found, conscious businesses create win-win-win strategies. > does it take courage for a ceo of a company, high-profile company, high-profile ceo, to say certain things that you know will have backlash. criticizing president obama. there have been people who say "i am not going to buy at whole foods anymore." does that matter to you? > > first of all, i never criticized president obama. i have never criticized president obama. i have questioned some of our economic policies, but i am not directly criticizing the president. i am not looking to be controversial. really i am just looking to be authentic and truthful. unfortunately a lot of times things get taken out of context, things get sensationalized. people just read those headlines. > but there is danger when you
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speak up, because people do overreact. > > we have not seen any negative impacts in our sales. i am not going out there trying to be a rabble rouser. i get interviewed, i get asked questions, i try to answer them truthfully. > john mackey from whole foods, thank you so much. > > thanks for having me on. still ahead, indie flicks are getting a spending boost from big budget studios. more on that next in movies and money. hey! did you know that honey nut cheerios
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based on the money studios spent on films this year at sundance, it could turn into another banner year at the box office. or will it? erik childress joins me on set. good to have you back. > > thank you. > let's take a look at the list: fox searchlight paying $9.7 million for "the way, way back." > > yeah, this is kind of the biggest deal that happened at sundance- > that's a lot of money! > > that is a lot of money actually, and fox searchlight- > is it a record? > > it wasn't exactly a record. but fox searchlight has a very good track record of picking up films at sundance. "little miss sunshine" was a sundance pickup, obviously a big hit. i think they're kind of hoping that this is a film- it is a coming-of-age film. it has some star power - steve carrell has a small role, sam rockwell is in the film. it was a big crowd- pleaser at sundance. i didn't get a chance to see it, but i heard nothing but really good things about it, so we'll probably maybe see that at the end of the summer. it might be a nice little surprise.
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> you had us at "little miss sunshine." all right, "don jon's addiction." > > relativity picked this up for $4 million. they actually made a deal to get it out there in theaters, like a $25-million commitment for prints and advertising and whatnot. kind of a very interesting choice, because it is joseph gordon- levitt's directorial debut, and it is a film about pornography addiction. and it's a comedy. it's not a serious movie. but i heard kind of mixed things about it, so, we'll see if- they had all the stars in the world last weekend with "movie 43," and they could barely open it to $5 million. so, good luck to them with that. > and the weinsteins picked up a film, "fruitvale." > > yeah, this is a film, it was the big audience winner and got the big prize at sundance this year. they picked it up for $2.5 million. i am sure they are probably going to try and make some awards buzz out of it. it doesn't have a big cast. michael b. jordan from "friday night lights," and octavia spencer from "the help" is also very good. it is a very good movie that you are going to hear more about later in the year, but we will see how it does at the box office. > here is what happened at the box office last weekend. any surprises here erik? "hansel and gretel" coming in at number one. > > not really. we kind of
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figured that of the movies that didn't get screened for critics last week, that this was going to come out number 1. not a very strong showing, only about $18, $19 million, so, not very much. > also on the list, "mama," "zero dark thirty," "silver linings playbook" moving on up, and "parker." > > "silver linings playbook" is turning into quite a little hit. in the two weeks since it got its eight oscar nominations, it has made more money than it did in the first two months of its limited release. > i loved that film the first time. i questioned whether i would love it as much the second time - and i really loved it the first time. > > it is still good. > good to know. this weekend at the box office, a couple of big films: "warm bodies" and "bullet to the head." > > i think you might have another kind of soft weekend at the box office. just a couple weeks ago arnold schwarzenegger had "the last stand." really bombed at the box office. so you've got stallone. i would be surprised if this thing makes $10 million this weekend. "warm bodies," i think everything else is going to drop off really quickly, so i think "warm bodies" might take the top spot for around $15 million or so. > thanks erik. > > thank you. coming up, a trader's take on facebook as investors decide whether they want to remain friends with stocks after earnings. chart talk is next.
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for a trader's take on the fallout from facebook and from qualcomm, we are turning to matt cavanaugh of cmz trading. good morning matt. let's start with facebook. i am hearing this stock has support at $28. what do you think? > > you definitely saw it. you saw the stock sell off initially, rally back. that is exactly what you are seeing there. this stock has rallied 50%+ in the last three months, so you had some initial profit- taking, and then you had people taking the other side. good things going on at facebook, and the fact that they have 618 million daily users. a ton of users. the question is, how did they monetize that? how do they justify their really expensive p/e ratio going forward? and that is what you're seeing. you're seeing people go on both sides. some people thought it was a buy at $40, some people thought it was a sell at $20. so this is one of those stocks that if you believe in all that they are doing, maybe you buy some on some selloff. but really, be careful, because it could go either way. > qualcomm investors had a one-
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way ticket last night. that stock headed higher off of positive earnings and the forecast. > > yeah, you know, this was a stock we have talked about before. we liked it then. still like it now even with this run- up. it looks like it's pretty cheaply priced still. you look at this business, their business is going crazy. really a mobile world, and they are poised to benefit from it. they are just doing really well, and it still looks attractive, so i think you can ride it for a while. > qualcomm also makes chips for the iphone 5, so that never hurts. good to have you on the show this morning. that is matt cavanaugh of cmz trading. that's all the time we have for today. coming up tomorrow in traders unplugged, is exxon a buy, sell or fold now that it's once again the most valuble company on wall street? from all of us at first business, have a terrific thursday!

First Business
KICU January 31, 2013 4:00am-4:30am PST

The Whole Picture News/Business. Angie Miles. (2013) Whole Foods CEO John Mackey. New. (CC) (Stereo)

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